Initial public offers hit record high

A boom in December in initial public offers of shares, particularly among uranium explorers, is expected to lift the number of floats in calendar 2006 to a new record, says financial services provider Deloitte.

The Deloitte IPO report said the number of floats was expected to rise to a record 192 in 2006, compared to 172 in 2005.

But total funds raised are set to almost halve to $8.5 billion, excluding the float of the third tranche of Telstra shares, from $15.2 billion in 2005.

There had also been a lower number of floats among established industrial businesses.

The 16 floats this year so far raised just $843 million, compared to the $3.5 billion raised by 19 businesses in 2005.

Private equity funds also had kept some potential floats away from the public market.

The 10 largest floats in 2005 raised $4.9 billion, or 58 per cent, of all funds raised through IPOs in 2006.

The biggest float was that of explosives maker Dyno Nobel, which raised $1.07 billion, followed by earth moving equipment firm Emeco Holdings at $942 million.

Resources dominated IPO activity in 2006, with the sector set to produce 77 floats by the end of the year, raising $1.7 billion.

The average was boosted by exceptionally high returns from floats of resources companies, which accounted for eight of the 10 best performing floats over the past year, reflecting high commodity prices.

The highest return was 395 per cent for Perth-based iron ore explorer Red Hill Iron, while the minimum return among the 10 best performers was 200 per cent.

Three of the top 10 performing IPOs were companies involved in uranium exploration.

In the December quarter of 2006, 12 floats raising $74 million are to be undertaken by companies focusing on uranium exploration.
Resources companies also accounted for seven of the 10 worst-performing floats.